If your company is active in international business, you may have already noticed on your account statement that there is a AWV obligation to report to the Bundesbank. Anyone who forgets this reporting obligation can quickly face penalties for foreign bank transfers. We clarify.
Duty to report according to AWV for foreign transfers
In principle, every payment made abroad is subject to a reporting obligation in accordance with § 67 of the Foreign Trade and Payments Ordinance (AWV). The law provides for an exception for small payments not exceeding 12,500 euros. These are not to be reported. Similarly, payments made for the import, export or transfer of goods shall not be reported. There are also exceptions in § 67 AWV with regard to loans.
Tip: Only deliveries of goods are exempt from the obligation to register. Whoever runs software or technology has the reporting obligations!
The obligation to report exists both for incoming and for outgoing payments.
In principle there is a reporting obligation for all residents who receive money from foreigners. The money does not even have to come directly from the foreigner. If another person acts on behalf of a foreign company or person, this payment must also be reported. Conversely, outgoing payments to foreigners must also be reported. The AWV reporting obligation therefore also applies if payments are processed via Paypal or Ebay where the amount exceeds the reporting limits.
It is important to note that the reporting obligation also applies if a invoice has been made or the payment is collected by direct debit.
The law also stipulates that a “payment” within the meaning of the AWV also exists when assets or rights are transferred to companies, branches or permanent establishments.
It is also important to note that reporting obligations also exist when it comes to reporting the status of foreign receivables and liabilities (e.g. to foreign banks) of more than 5 million euros, as stipulated in Section 66 (1) AWV. Direct or indirect participations in companies may also be subject to reporting requirements if the share of capital or voting rights amounts to 10% or more and the balance sheet total of the investment property exceeds EUR 3 million.
When do AWV reporting obligations exist?
- Received or sent payments over €12,500
- Also transactions via third parties that are indirectly due to foreigners
- Integration of property or rights into companies by foreigners
- Foreign receivables and payables (e.g. to foreign banks) of more than 5 million euros
- Securities transactions
AWV message, what needs to be reported?
The process of payment to the Deutsche Bundesbank must be reported. The notification must be made directly by the client using the Form Z4 via the website of the Deutsche Bundesbank. Private individuals can also report their payments by telephone to the Bundesbank hotline. As a rule, the following points are reported:
- Who reports the payment,
- the payee and his or her country,
- Description of the payment
- amount affected
- Payment date
- if applicable, the ISIN, the nominal range and the number of shares
The Z4 report is generally submitted via the AMS portal of the Bundesbank. AMS stands for General Reporting Portal Statistics. For this a registration is necessary, which should take place in time before the payment, so that no deadline excesses develop.
From which amount do I need to report to the Bundesbank
A Z4-Meldung is obligatory from a payment of 12.500 € in any case. In principle, companies should therefore carry out active monitoring in order not to overlook any reporting obligation.
Is a notice also necessary for securities?
Yes, here too a reporting obligation applies when it comes to securities transactions or financial derivatives in foreign trade. Then a Z10 declaration is necessary.
Do private persons also have to submit a declaration?
Yes, the AWV declaration also applies to private persons. Fines can also be imposed here.
AWV message forgotten or late, what to do?
The Z4 declaration must be submitted to the Deutsche Bundesbank by the 7th calendar day of the month following the month in which the payments or benefits were made. Otherwise it is delayed and is considered not delivered. For other reports, different deadlines may exist, which should be taken from § 71 AWV in individual cases. If you have submitted the AWV message forgotten or late, there is a risk that a fines procedure will be initiated against you.
The same applies to erroneous or incomplete messages according to AWV. It is not only forgotten AWV reports that carry the risk of a fine procedure, but also incorrect reports.
Companies are checked at regular intervals to ensure that they comply with reporting regulations. An infringement may also be noted incidentally in the context of a customs audit or external audit.
Under Section 23 of the Foreign Trade and Payments Act (AWG), additional information may be requested from the party concerned. It must be carefully weighed which information one really wants to give to the customs inspector. Because there is basically the right to not to burden yourself. Companies should therefore check which statements they wish to make about the facts and seek advice for safety’s sake.
Attention: The fine for violations of the AWV reporting regulations can be up to 30,000 € per violation.
Forgotten Z4 message results in penalty
If a fines procedure has been initiated, then should be checked as soon as possible with legal assistance whether it is possible to position oneself here accordingly.
It has to be checked in any case,
- whether the initiation of the administrative fine proceedings is lawful,
- the regulations were really not complied with or there is an exception to the AWV reporting requirement,
- if something can be saved afterwards,
- if a self-display is possible.
Since up to 30,000 € can be imposed per infringement of fines – also against the management personally -, fine proceedings due to forgotten Z4 notifications should absolutely be taken seriously.